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How does a reverse mortgage work

A reverse mortgage is simply an FHA interest only home loan program with an option not to make any interest payments for as long as long as you and your spouse reside in the home.  The reverse mortgage program is regulated by the Federal Housing Administration (FHA). The Federal Housing Administration’s role in the reverse mortgage program is to set forth the FHA home mortgage lending rules, regulations and guidelines (loan requirements) for FHA home loan mortgages as well as monitor the performance of the funded FHA reverse mortgage home loans on a national level and adjust or change the current lending guidelines in order to promote maximum economic stability.

The FHA loan program was originally established by the American government to assist U.S. citizens with moderate to below average income and below average credit scores, access to home mortgage loans with very low down payments and interest rates. The trade off that makes this loan program work, is the requirement of mortgage insurance which is paid every month along with the mortgage payment. The purpose of the conventional FHA home mortgage loan program was to encourage home ownership on a national level by making it affordable for first time home buyers to buy with low down payments.

A reverse mortgage is also an FHA loan but the FHA fee is paid at closing instead of monthly and for this reason, the closing costs are a bit higher. The FHA reverse mortgage loan program, provides the qualified home owner several financial loan options to help maintain a worry free quality of life. The purpose of an FHA home is to provide the qualified senior home owner with very little cash reserves in the form of savings investments and retirement funds that find themselves facing monthly expenses that are exceeding in most cases, a very limited fixed income, an option to make it easier to maintain home ownership as well as additional monthly living expenses.

If you are a senior home owner who qualifies for a reverse mortgage, if you have necessary living expenses that you are having trouble paying and you are watching your savings account drop like a lead balloon, if you have no family or friends that can help support you, if you cannot bare the thought of selling your beloved home and belongings to down-size into a small apartment or assisted care facility, than a reverse mortgage is your best option for real financial relief and a better quality life.  

In order to qualify for a reverse mortgage, you must have substantial equity in your home and cannot owe more than 50% of the value of your home. If there is only one home owner, the minimum age of the home owner must be 62. If there are two owners (husband and wife) on the title of the home, either husband or wife must be at least 62 years of age. Also the property needs to be FHA approved. A single family home is automatically approved if the home is in proper condition. A townhouse is also an FHA Approved property as long as the legal description of the town house says townhouse, not condo.  A condominium is only and approved FHA property if the development is an FHA approved development.

Manufactured homes are also an approved FHA property, but most reverse mortgage lenders opted out of funding reverse mortgage loans for manufactured properties and only a few Lenders remain and are available provide funding for reverse mortgage loans on manufactured properties. For Manufactured properties, there are additional restrictions and guidelines. Manufactured homes older that 1976 will not qualify, an engineering report will be required in order to verify that the manufactured home is built on a permanent foundation or tied down to a required number of properly of FHA code approved and installed anchors.  A manufactured home must be a double-wide. Single wide manufactured homes will not qualify for a reverse mortgage and no manufactured home in a flood-zone will qualify for a reverse mortgage as well.

If you feel you qualify for a reverse mortgage and are interested in financial relief, the next step is to determine which reverse home mortgage will best address your financial needs and most suitable for you and your family.

Once you have decided which reverse mortgage program you are interested in, the final step is to get quotes from different lenders using the exact program, loan amount and interest rate to make it much easier for you to determine which of the reverse mortgage lenders is the most reasonable in regard to loan fee’s and title fees

Reverse mortgage Lenders direct: reversemortgagelendersdirect.com and Click quote save Clickquotesave.com are two of the nation’s top reverse mortgage consumer protection web-site tools designed to protect elderly reverse mortgage candidates nationwide, from predatory lending practices by providing easy to compare quotes from different reputable lenders.